The issue is that most of the successful companies we know are more than 50-100 years old, and few start-ups make it to become large and profitable companies - except in the tech space where relatively young companies like Microsoft, Apple, Google and Amazon have grown to become giants and have redefined whole industries.

On one hand it is extremely hard to grow a start-up outside the tech space, and on the other hand traditional incumbents seems to struggle to innovate. So how do we combine the best of both worlds?

At the heart of the challenge is that the desire and need to innovate brings us into new territory - moving us from known to new and unknown capabilities and/or markets.

Hence when you innovate to create the business of the future you cannot rely on everything that got you to your current success - you need to challenge the assumptions of your existing business: what to build upon and how to utilize your corporate strengths, what to forget, and what new stuff you need to learn and add.

"A big question now is how to scale these innovation efforts and leverage the competencies and execution strengths of the core business."

Jakob Holst, Executive Director, DTU Business

Companies have realized that the old and tested practices of managing a growth core business do not provide the learning speed nor organisational agility to forget old practices and learn new fast enough. That is why companies have created innovation hubs & labs, invest in scouting outposts, engage in open innovation initiatives, engage with start-ups and apply agile learning methodologies.

A big question now is how to scale these innovation efforts and leverage the competencies and execution strengths of the core business - as very few of these innovation lab projects turn into impactful businesses. Incubating and scaling up is currently the missing link. If left unsolved, these innovation initiatives will risk to end like the corporate venture funds in the late 1990's - they ran out of steam and were all closed down.

We have been working with more than 20 large companies over a period of 10 years to address exactly this issue of creating significant new business from opportunities through corporate innovation.

The good news is that it is certainly possible - the daunting part of the news is that it takes 5 - 15 years before these initiatives are turned into a significant business and become growth driver for the whole company. We also see that many promising opportunities get closed down prematurely.

That has led me to formulate, what I jokingly call "the first law of innovation"

Management patience is shorter than Time to Business
Most of the projects are killed due to this law because they are uncertain, don't fit short term strategy and don't show results in the medium time frame.

3 elements seem to be extremely important for success.

Dream:
an overarching purpose for the future which is engaging and stronger than the short term KPI's

Learning:
the organizational ability to learn quickly and embrace uncertainty

Execution:
creating the right partnership between the innovation initiative and the core business to scale and redirect the most promising opportunities to reach a true new business.

There is no simple answer to getting it right - but a good start is to think of innovation as corporate entrepreneurship.

If your senior management team want to get inspired by DTU Business and the experiences of the 20 companies - you can book Jakob for a 1 hour workshop.

Corporate Business Innovation - Certificate in Entrepreneurial Leadership, CEL™ Program

Be succesful in business innovation and product development and prepare your company for the future. CEL™ is a proven 7-month executive program where managers learn how to turn opportunities into profitable businesses. Contact us to learn more about the CEL™ program.